Britain is just too expensive, says HSBC

HSBC has stepped up its threat to move its headquarters out of Britain as it reported a one-third drop in quarterly profits and warned of difficult headwinds ahead.

On a grisly day for bank stocks, shares in HSBC dived by almost 6 per cent to 506p as it reported a fresh blow-up in its American sub-prime lending division and revealed how its investment banking arm had been clobbered by the eurozone crisis.

Stuart Gulliver, the chief executive, warned that staying in Britain could cost the bank an extra $2.5 billion (£1.6 billion) a year, mainly because under tougher capital rules it would be required to hold $55 billion of government bonds that it did not need or want. “That’s quite a lumpy number,” he said.…